Monday, the FTC announced a lawsuit against corporate giant Amazon for holding an illegal monopoly of power. The lawsuit includes charges of inflating prices and degrading the quality of products.
Amazon, a leading e-commerce business, is facing a lawsuit for monopolizing at least two business areas. The lawsuit states, among other allegations, that Amazon tricked their consumers into purchasing Prime memberships on monthly and annual subscriptions.
The FTC first started the lawsuit and has gained traction, with 17 state attorney generals joining the fight against the e-commerce giant. The lawsuit also covers antitrust between Amazon and its consumers.
Amazon responded to the FTC lawsuit allegations, stating that this lawsuit may cause several issues for the company’s consumers. Some of these issues include higher prices and slower delivery times.
Amazon also reacted to the allegations of monopolizing power as it relates explicitly to their programs being anti-competitive. The programs are Amazon Prime, fulfilled by Amazon delivery options, and special subscription pricing.
The FTC and 17 attorney generals argue that the company is not offering consumers a valuable, high-quality service. The lawsuit contends that Amazon is using its place as a monopoly to enrich itself while putting its consumers in a monopolized situation.
The FTC can prove its point on several counts. One of those counts is shipping. During the pandemic, Amazon confirmed that they could supply the country with the vast majority of what consumers need and deliver it to their door.
Many companies offered shorter product shipping times or free shipping for their consumers during the pandemic. Amazon took that a step further and expanded its businesses to offer more items smaller companies could not provide at the same price.
Examples of these products include Amazon’s prescription delivery service and fresh food delivery services. Both services were standard with other companies, such as DoorDash or local pharmacies, but not at the price mark Amazon offered.
Amazon has a monopoly in rural areas and for consumers who are elderly or housebound as well. This monopoly does give the company a foothold that may be hard to loosen even with the FTC lawsuit.